Leading business by design

The Warwick Business School and the Design Council have partnered to explore the intersection between design, business and behavioral science. They have published research and case studies of how businesses are using design and what their people say about it. It is called “Leading business by design: Why and how business leaders invest in design”. Here are some interesting ideas from it.

Design can be used in three different ways: as a service, when technical experts fulfill predefined tasks; as a key perspective in the development process or as a key strategic perspective, when design shapes strategy. Design can add value by: driving innovation and opening up uncontested market spaces; differentiating products and services to attract customers; strengthening branding, embodying company’s values and improving recognition. Design has the following quantitative and qualitative benefits: sales growth, increases in market share, cost reduction and enhanced efficiency in production; facilitation of interdepartmental collaboration and encouragement of dialogue, teamwork and productivity; changes in physical office spaces to better reflect the brand and improve the working practices; finding structured and consistent approaches to product/service development.

Design is problem solving and looking at things differently. We need to seek unique perspectives which encourage more exploration and experimentation. “A culture that leads to great design is really about getting to the core of problem solving” — core team leader, R&D, Herman Miller. To challenge ourselves to think differently, we need to involve key stakeholders early in the design process (customer centricity). The design impact is lowest when it is seen as a service with well-defined and a limited scope and greatest when it challenges existing assumptions and meanings of products, services and categories. What’s at the heart of what we do? Why do we do things this way? Is there a better way? What are the role and impact of our design? What are our internal company values? In our design, we need to focus on value and purpose.

Design has financial impact on performance. To maximize it, we need: to avoid limiting the context in which design can operate; to use it as a differentiator; to integrate it with branding; to introduce a design process; to trust and support our design talents; to embed design in the organizational culture; to design our work environment. We can strengthen a brand through a stronger connection with the customer and its needs by trying to meet them in more emotional ways. We shouldn’t only provide the services customers want, but also the ones they don’t know they need. “You can design something, but if customers don’t find it to be what they’ve been wanting and it’s not differentiated, it’s difficult to sell.”

The return on design investments can be big, but they need to be connected to the product/service outcomes. Design can improve finances, brand recognition, strategic thinking, morale. It has been traditionally regarded as the aesthetics of product in relation to functionality and usability, but recently we have started to connect it more with the creation and development of meanings and with a way of thinking and doing. Design can be critical to companies at a very high level and it often needs to be applied in a broader context. It can play a strategic role within an organization, not only because it can inform choices about product branding and positioning. “Strategic use of design refers to whether design is embedded in organization processes and informs strategic choices; whether it is used as a means to differentiate from competition and whether senior management have good understanding and appreciation of design.” Support from top management enhances the value of design.

Design can make people think differently by challenging existing paradigms. It can both please and provoke.

Great design captures attention from an early stage (like the labels of consumer goods). It often draws the customer and enables a first-time connection. It makes the products distinctive and marketable. Important are the appearance, ease of use and functionality of the product, but from the customer’s point of view.

The finance manager of Challs said: “I don’t think that design should necessarily be limited to how our products look on the shelf. I think design should be part of our organizational culture, it should be embedded in how we do things, who we are, everything we know, from start to finish. This bottle looks like that because that’s who we are.”

Design can change the work environment and the the internal company culture. Having open workspaces or “innovation rooms” that energize enhances the creativity of the designs. Environment, process and outcomes are inextricably linked and reinforce each other.

We need to deliver the best products, services and experiences (the last is an equal player here). Success in design often depends on our capacity to deliver a unique experience to the customer.

“Designers look for opportunity wherever it exists and not just looking for obvious places where the business would like to look.” — digital director at Barclays

The brand is what the customers experience while they interact with the company. “It is very important for a brand to come alive in your experience patterns and your design language. That really has to be thought through. There’s real art to that.” — group design director at Barclays

Good design sells. It can enhance the customer experience and thus command higher prices. Design, ideas and innovation can create many sales. The redesign of Johnnie Walker fueled global net sales growth of 27%. It is a good idea to reinvest a good share of the profits back into ideas and innovations. These ideas need to result in profitable products that customers will be ready to pay for. “Investing in design and focusing on improving customer experiences can lead to higher net promoter scores, which in turn will drive higher income and reduce complaints, thereby lowering costs” — chief design officer at Barclays

Better collaboration between designers allows faster times to market. Diageo has collaborative and alignment-based culture. They approve work by a maximum of two people. At Reckitt Benckiser, design isn’t only about packaging, but also consumer experience and cost-effectiveness (cost-value tradeoffs). At Gripply, people are free to explore many new ideas. At Virgin Atlantic, design is culturally embedded.

Design is both an internal and external reflection of the brand and must be guided by its attributes. It can convey the uniqueness of the brand and reveal its values (what it stands for) to the outside world. It has to spur and enable innovation while keeping true to the brand values. Our language, thinking and process need to fit to our brand. The design has to be put at the heart of what we do and it needs to lead to some kind of competitive advantage. Many companies don’t have the capacity to design outstanding products, which is one reason why design is such a differentiator. Pushing our creative level all the time is important as there’s always room for improvement. If we choose to offer services, our service quality needs to be very high. Design is a process that helps bring service to life.

For Herman Miller, design is a philosophy and a way to radically innovate. The designers there play the role of “provocateurs” in early explorations. The company develops strong relationships with many highly-capable, external designers. Royalty agreements between the company and its designers are made to align the goals with rewards. Concepts are then developed into commercial products. The director of finance at Herman Miller said that design could be most of the value of a company.

What is the purpose of creating this beautiful thing? How does this enrich the lives of the employees who work here? Which new markets can we enter where noone has been before? Can we create a whole family of products and if so what benefits will they have?

Innovation is about having something ownable, something to which we can strive.